First Family Church spent thousands on legal fees, document indicates
First Family Church spent thousands on legal fees, document indicates
By JUDY L. THOMAS - Kansas City Star - 3/24/2008 - original
Facing investigations by the Kansas attorney general, the Kansas Department of Revenue and the Internal Revenue Service, First Family Church has spent hundreds of thousands of dollars on legal fees to defend itself, according to a document obtained by The Kansas City Star.
The document, prepared by the Overland Park church last year to solicit money from a major donor, said the church needed an additional $900,000 — on top of $365,000 already spent — for a legal defense and public relations fund.
The document also noted that the church had lost nearly $3 million in donations from 884 families who had stopped giving since The Star published a story in March 2007 that raised questions about financial accountability surrounding the Rev. Jerry Johnston.
The Star has reported that the Kansas attorney general’s investigation into the church’s finances is continuing. Kansas Department of Revenue and IRS officials have declined comment.
Church officials, through their spokesman, raised doubts about the document’s authenticity, yet said the church would not publicly comment on “property stolen from the church.”
As for the investigations, church spokesman Ronn Torossian of 5W Public Relations in New York City said in a statement: “The church is unaware of any pending IRS or Department of Revenue investigations regarding the church.…We are fully compliant with all local, state and federal laws.”
The Star was given the document, dated July 22, 2008, by two sources over the course of several months.
That version of the document was tailored for Living Stones Foundation, a charitable trust in California that awards grants to Christian ministries. Its founder, entrepreneur Ken Eldred, recently was a guest speaker at First Family Church. He and Johnston, the church’s senior pastor, also serve together on an international church growth board.
It is unknown whether Living Stones Foundation gave First Family Church the additional money it was seeking. Eldred did not respond to requests for comment. But this month Johnston told the congregation that the church was returning to television, which it did.
“First Family goes back on television every day beginning Monday, April 13,” he wrote in an e-mail to church members. “How I praise God for a new door He has opened.”
According to the document, First Family Church and Johnston came under attack by the media several years ago because of the church’s “political impact,” particularly its involvement in supporting a marriage amendment in Kansas. Those “attacks” have continued, the document said, and have cost the church a huge amount in legal fees and lost donations.
The state’s investigations began after The Star reported that hundreds of members had left Johnston’s church in recent years because of concerns about financial accountability.
Those concerns included unfulfilled promises made to donors and the church’s refusal to open financial records to members. The Star also found that the organization of the megachurch at 7700 W. 143rd St. was such, critics said, that there was little financial oversight.
The stories led to the filing of two complaints with the attorney general’s office — at least one by a former church member — alleging that Johnston used church money for personal gain and failed to follow through on promises made in fundraising solicitations. Kansas law prohibits charities or religious organizations from using donations for purposes other than those stated in their solicitations, or using donations for noncharitable purposes.
Complaints also were lodged with the IRS alleging that Johnston and his son, Jeremy, the church’s executive pastor, used church funds and employees to help run their for-profit businesses. Those companies have since been dissolved.
Johnston and the church’s board members have said the church is accountable and that the board of trustees oversees all of its finances. The church also undergoes an annual audit. Since The Star’s stories were published, four new members have been added to the board — including Jeremy Johnston — bringing the total to 11. Jerry Johnston and his wife, Christie, also sit on the board.
In early 2007, the church’s average weekend attendance was 2,400, according to the document. In the fall of 2007, several months after The Star’s stories, the average attendance had dropped to 1,650, and the winter 2008 attendance dipped to 1,500, according to the document.
Church spokesman Torossian said that attendance in recent months, however, has increased by nearly 1,000 at weekly services.
The church also said in the July 22, 2008, document that it had made budget reductions to compensate for the loss in revenue, including cutting staff from 90 to 30 and discontinuing all radio spots, TV commercials, newspaper ads and direct mailings.
It also eliminated nearly its entire television ministry, according to the document.
From March 2007 to spring of 2008, the church spent $365,000 to defend against what it called the “attack,” according to the document.
But it noted $900,000 in additional funds was needed in order “to survive media attack with the nation’s top attorneys and PR firm” and to “recapture lost ground in evangelism and cultural and political impact.”
Included in the $900,000 total was $100,000 to pay for 10 more months of work by the 5W Public Relations firm, which has represented faith healer Benny Hinn, rappers Snoop Dogg and Lil’ Kim, and the founder of the “Girls Gone Wild” video empire.
Another $250,000 was proposed for attorney and accounting fees for summer and fall of 2008; $80,000 for media editing costs for two shows; $150,000 to send direct mail to the community for a year; and $320,000 to air three television broadcasts each week for a year.
The document concluded: “Our entire nation needs Jerry Johnston’s influence to lead it in regards to Biblical Absolutes and Moral Standards. With the capability to survive this current battle, and regroup for future battles, that impact can occur.”